Date: 20011101
Docket: 2000-1688-IT-I
BETWEEN:
MONIQUE McILHARGEY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REasonsfor Judgment
Mogan J.
[1] The Appellant and her husband live in Three Hills, Alberta, northeast of Calgary. They wanted to have children but she was not able to conceive a child because of a condition known as "endometriosis". The Appellant and her husband adopted twin girls in January 1998. The adoption was arranged through a licensed agency in Alberta identified as "Adoption Options". In 1997, the Appellant paid $6,936.16 to Adoption Options in connection with the adoption of the twin girls.
[2] When computing her income and her tax for 1997, the Appellant claimed a tax credit under section 118.2 of the Income Tax Act on the basis that the amount of $6,936.16 was a medical expense. The claimed tax credit was disallowed by the Minister of National Revenue. The principal issues in this appeal are (i) whether all or any part of the amount $6,936.16 is a medical expense within the meaning of section 118.2; and (ii) if not, does section 118.2 contravene section 15 of the Charter of Rights and Freedoms with respect to discrimination. Only the 1997 taxation year is under appeal. The Appellant has elected the informal procedure.
[3] The Appellant and her husband wanted to have children of their own but went through a period of five years without being able to conceive before they adopted the twin girls in January 1998. The Appellant states that her disability is infertility. Endometriosis is a disease of the female reproductive organs which makes it difficult for a woman to conceive. The Appellant thinks she has had this condition since 1982. The surprising fact is that, after adopting the twins in 1998, the Appellant and her husband conceived later that year and have a natural born son who arrived in January 1999 when his twin sisters were two years old. Also, the Appellant was pregnant for the second time in January 2001 when this appeal was heard. As the Appellant stated, she became pregnant in 1998 and 2000 "the old fashioned way".
[4] When the Appellant and her husband were still childless in 1997, she took in vitro fertility (IVF) treatments at the Foothills Hospital in Calgary. The IVF treatments cost approximately $6,000 and the cost was paid to the Foothills Hospital where the treatments were received. When the IVF treatments were not successful, the Appellant and her husband decided to follow the adoption route. She stated that, prior to 1989, almost all adoptions in Alberta were processed through a social services agency administered by the provincial government. Around 1989, the Province of Alberta decided to license private agencies to process adoptions. The province continues to process adoptions through Alberta Family & Social Services but the Appellant stated that, by 1997, 95% of adoptions were processed through private agencies and only 5% processed through the provincial agency.
[5] Exhibit A-2 appears to support these percentages. According to the Appellant's interpretation of Exhibit A-2, there were 234 infant adoptions in Alberta between April 1, 1999 and March 31, 2000 (excluding spousal adoptions by a stepparent). Of that number, 12 were processed (at little or no cost to the adopting parents) through Alberta Family & Social Services and the remaining 222 were processed through private adoption agencies with a cost to the adopting parents, like the amount $6,936.16 which the Appellant and her husband paid to Adoption Options. The Appellant stated that, in 1997, the waiting period to adopt an infant through the provincial agency was approximately five years because so many adoptions were going through the licensed private agencies. The Appellant and her husband decided to avoid the five-year waiting period by attempting to adopt through Adoption Options.
[6] Exhibit A-1 is a document from Adoption Options showing the fees and disbursements paid by the Appellant and her husband in connection with adopting the twin girls. The fees are $6,700 and the disbursements are $236.16. The Appellant has highlighted the following five items which were fees for only counselling:
February 1997 Pre-adoption seminar $600
March 1997 Pre-adoption counselling 600
May 1997 Homestudy 1,100
May 1997 Preplacement counselling 1,000
January 1998 Postplacement counselling 300
Total $3,600
[7] The Appellant's first claim is that the above $3,600 should be allowed as the basis for a tax credit under paragraph 118.2(2)(e) of the Act which states:
118.2(2) For the purposes of subsection (1), a medical expense of an individual is an amount paid
...
(e) for the care, or the care and training, at a school, institution or other place of the patient, who has been certified by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specially provided by that school, institution or other place for the care, or the care and training, of individuals suffering from the handicap suffered by the patient;
I cannot allow the claim because there is no evidence that the Appellant was "certified by an appropriately qualified person" to be a person who, by reason of a physical or mental handicap, required any "care and training".
[8] The Appellant argued that adoption is therapy for the mental illness of depression associated with infertility and childlessness. Adoption through private agencies is the only practical route in Alberta and it is costly. Adoptive parenthood ought not to be a privilege just for the wealthy. If adoption costs paid to private agencies are not regarded as medical expenses (to relieve the depression associated with childlessness) then section 118.2 of the Act discriminates against adults who want to be parents but are infertile.
[9] The first question is whether any of the amounts paid to Adoption Options can qualify as a "medical expense" within the meaning of subsection 118.2(2) of the Act. Exhibit A-1 describes briefly the service provided and the fee charged as follows:
|
FEE |
AMOUNT |
|
Application |
$500.00 |
|
Pre Adoption Seminar |
600.00 |
|
Pre Adoption Counselling |
600.00 |
|
Homestudy |
1,100.00 |
|
Preplacement Counselling (BP) |
1,000.00 |
|
Medical/Social History |
200.00 |
|
Post Placement Services |
200.00 |
|
Post Placement Counselling (BP) |
300.00 |
|
Preparation and Filing (twins) |
2,000.00 |
|
Medical Report on children |
100.00 |
|
Process Serving |
100.00 |
In paragraphs 6 and 7 above, I explained why I could not accept the five counselling amounts as medical expenses under paragraph 118.2(2)(e). Considering all amounts paid to Adoption Options, I regard them as personal in nature and not medical expenses within the meaning of the Act. The services provided by Adoption Options were not delivered through medical doctors or nurses or other professionals in the field of health sciences. Instead, all of those services were delivered through social workers. Those services are necessary to secure the safety and well-being of an adopted infant but they are not medical expenses.
[10] Adoption Options is not a hospital, medical clinic or other institution concerned with health sciences. It is a provincially licensed private adoption agency. In market terminology, Adoption Options is a broker which brings together persons who have infants available for adoption and persons who want to adopt an infant under the laws of Alberta. As a licensed broker, it is required to take certain steps to secure the safety and well-being of the adopted infant, and it charges one of its clients (the adopting parent) a fee for taking those required steps. The fee is far removed from a medical expense.
[11] In presenting her appeal, the Appellant has concentrated on the reason why she and her husband became clients of Adoption Options. The reason was her infertility. So long as she was dealing with her infertility as a medical problem and was trying to solve that problem with the help of health science professionals (like her attendance at the IVF clinic at the Foothills Hospital), the cost of such help would probably be a medical expense within the meaning of the Act. But when she and her husband accepted her infertility as a permanent condition and made a joint decision to overcome their childless state (a consequence of infertility) by adoption, they were using a social policy process rather than a medical procedure. The cost of pursuing the social policy process of adoption is not a medical expense and is not in any way related to a medical expense. It is a personal expense expressly prohibited as a deduction in computing income under paragraph 18(1)(h) of the Act with no related tax credit under section 118.
[12] In response to the first question, I have determined that none of the amounts paid to Adoption Options was a "medical expense" within the meaning of subsection 118.2(2). The second question is whether the Act discriminates (under the Charter) against adults who want to be parents and are required to adopt because they are infertile. In other words, is the Appellant in a discreet class of persons who are prejudiced by the operation of section 118.2? In my opinion, the Appellant's argument with respect to the Charter has no merit at all.
[13] There are many reasons why a couple like the Appellant and her husband would want to adopt children. Infertility is only one reason. Some other couple may have a serious genetic problem which would cause their offspring to be unhealthy. Another couple may not want to increase the world population. And another couple may want to provide a good home for an infant who would otherwise grow up in third world poverty. The important fact is that, whatever the reason for choosing the adoption process, adoption costs do not qualify as a basis for a tax credit for any person in Canada.
[14] This appeal is not concerned with a situation in which the Appellant may not claim a tax credit with respect to her adoption costs while other persons in different circumstances may claim a tax credit with respect to their adoption costs. This appeal is concerned with a situation in which no person in Canada is permitted to claim a tax credit with respect to adoption costs. Therefore, the Appellant does not have any argument under section 15 of the Charter about equality "before and under the law". All persons in Canada who adopt children are treated equally under the Income Tax Act in the sense that no one is permitted to claim a tax credit with respect to adoption costs.
[15] It appears that the Appellant wants the Court to use section 15 of the Charter to construe section 118.2 of the Income Tax Act in a way which will give her the same tax credit as some other taxpayer who has genuine medical expenses. But in fact, the Appellant wants to amend the Income Tax Act to put adoption costs on the same footing as medical expenses. What the Appellant needs is an amending act of Parliament and not some forced construction of the existing law, relying on the Charter as a prop. The appeal is dismissed.
Signed at Ottawa, Canada, this 1st day of November, 2001.
"M.A. Mogan"
J.T.C.C.
COURT FILE NO.: 2000-1688(IT)I
STYLE OF CAUSE: Monique McIlhargey and
Her Majesty the Queen
PLACE OF HEARING: Calgary, Alberta
DATE OF HEARING: January 19, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge M.A. Mogan
DATE OF JUDGMENT: November 1, 2001
APPEARANCES:
For the Appellant: The Appellant herself
Counsel for the Respondent: Michael Taylor
COUNSEL OF RECORD:
For the Appellant:
Name: N/A
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-1688(IT)I
BETWEEN:
MONIQUE McILHARGEY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on January 19, 2001, at Calgary, Alberta, by
the Honourable Judge M.A. Mogan
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Michael Taylor
JUDGMENT
The appeal from the assessment of tax made under the Income Tax Act for the 1997 taxation year is dismissed.
Signed at Ottawa, Canada, this 1st day of November, 2001.
|
"M.A. Mogan" |
J.T.C.C.